Razorpay's ‘Full Stack' Ambition
Forbes India|April 9, 2021
The fintech unicorn has gone beyond payments into neo banking and facilitating loans and insurance. The dream is to become the only financial platform a business will ever need
Harichandan Arakali

Deepak Abbot, co-founder of India gold, had a small story about fintech unicorn Razorpay, which he recently recounted on Twitter. India gold, a Gurugram-based startup that offers gold loans and coins via an app, ran out of balance at one of its bank accounts one Saturday night in early February, after Abbot missed the email alert about it. The startup had regular payouts using that balance, and to make matters worse, the bank’s systems were under maintenance that night for eight hours.

Abbot tried transferring money from his personal account, but his bank had a 24-hour restriction after adding a beneficiary. And a transfer via unified payments interface couldn’t be done as the account where the balance was fast diminishing was a virtual one. A few other options didn’t work either, he recalled.

“I pinged Harshil Mathur at 10.30 pm and asked for help,” Abbot wrote. He requested Mathur, co-founder and CEO of Razorpay, to add ₹5 lakh to Indiagold’s balance. He knew it was a long shot because it wasn’t the payments platform’s responsibility to do this, but he tried his luck anyway.

“I expected Harshil to pause and think, but he said ‘let us add 10 lakhs just to be on the safer side’.” And even as the two were chatting, one of Mathur’s colleagues sent Abbot a WhatsApp message that money had been added to the account.

“This is the startup collaboration and support system we need. This is how we grow the ecosystem together. I just can’t thank the whole Razorpay team enough for being so supportive and thoughtful,” Abbot wrote on Twitter the Monday after that weekend. “Customer for life,” he promised.

If Abbot’s experience is less an outlier and more the norm for how Mathur and co-founder Shashank Kumar operate, it explains a bit about how and why Razorpay is doing so well in a crowded field where many payments services providers are vying for customers. And Covid-19 has helped, because tens of thousands of businesses added digital payments options using Razorpay’s payments platforms, and millions of consumers took to making payments online using smartphones.

Covid accelerated and compressed several years’ worth of adoption of digital tech into a year. It put an already vibrant fintech ecosystem in India into a high gear, and investors in fintech startups anticipate the rise of many multi-billion dollar ventures in the sector.

“The fintech space today is structurally poised for the big league— the founders are a powerful mix of financial services insiders and tech hackers,” says Vikram Vaidyanathan, a managing director at Matrix Partners India, which was an early backer of Razorpay. Banks and infrastructure are now more ready for scale and speed, and consumers have more trust in technology to define their relationship with money, he adds.

“So, today I can tell you there will be multiple ‘decacorns’ in Indian fintech. I couldn’t make that statement in 2015,” Vaidyanathan says. By decacorns, he means startups privately valued at $10 billion or more. Razorpay became a unicorn—being valued at $1 billion—last October.

The fintech market in India was valued at ₹1,920 billion in 2019 and is expected to reach ₹6,207 billion by 2025, expanding at a compounded annual growth rate of 22.7 percent, according to a May 2020 estimate by Research and Markets.

At Razorpay, by July things were back at pre-Covid levels. And in roughly the last 12 months, payments volumes tripled over the previous year, Mathur tells Forbes India.

Razorpay’s efforts to simplify payments with its tools such as payments links, pages and buttons offer ways for merchants to quickly start accepting payments online without any cumbersome integration of their systems with Razorpay.

This not only brought in many first-time users, including small businesses, schools and restaurants, but freelancers and individuals as well. A whole ‘creator economy’ got a boost from the Covid-19 pandemic as people started monetising a wide range of activities from home—be it teaching music online or organising game shows or accepting donations for various causes. Many chose Razorpay.

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